EasyJet is under pressure this morning as analysts at UBS question whether it may be time for the shares to pause for breath.
The investment bank has downgraded easyJet to a "neutral" recommendation from "buy" and the shares are currently down 4.5p, or 1.1%, at 407.5p.
UBS comments:
"While we still like the business model and see upside to forecasts we think the shares will take a breather."
Still, they see possible further short term upside for the shares if the budget airlineappoints a chief executive to replace Andy Harrison. Chairman, Sir Michael Rake, said yesterday the airline was making "good progress" in finding a replacement for Harrison who will step down in June.
But all in all, UBS's favourite in the low cost airline sector is now Ryanair.
It comments:
"Over the last twelve months easyJet has outperformed Ryanair by over 25%. Furthermore since the beginning of 2010 easyJet has outperformed Ryanair by over 10%. We think this is now over done and see more share price upside from Ryanair than easyJet."
Ryanair shares in Dublin are virtually flat at €3.45.
